CNSW Market Update – 27/04/2018

This week has seen yet of another rise in international values with another round of CBOT futures bargain buying and short covering. Unsurprisingly, the full move wasn’t passed to values here in Northern NSW as our already strong basis absorbed some of the upside. Although, anywhere from $6-8/MT was passed onto northern domestic values.

Grower offers are still hard to come by, even with the recent upside in prices and it continues to be a result of the not so positive outlook around the current dry weather conditions we have been experiencing.

Regardless of the dry weather, we are starting to see some progress on new crop acres. There have been reports of dry sowing at Nyngan and some opportunistic sowing in Coonamble/Walgett after a few properties received good isolated showers. By no means is the soil profile in optimal condition to allow full scale sowing to commence, and we really do need a good widespread two to three inches to get back on track. But larger scale farming operations need to make a start (albeit dry) to ensure all acres are covered when an autumn break presents itself.

Newcastle track protein hasn’t seen as much upside as the feed wheat complex, but at the end of the day, the tightest balance sheet stems from the feed complex and while it remains dry, we could very well start to see SFW1 values close in on APH2 values here in Central NSW. Similar to that which has happened in Northern Newcastle/Southern Queensland zones where Prime Hard has been pricing at SFW1 values for a while now.

Barley sellers remain very hard to find, and anyone who has left over parcels is predominantly holding, should there be a need to supplement stock in the coming months. When faced with the risk of a potential $30/MT+ price drop should we see a decent rain event, there is a feeling the majority would be happy to accept the downside in prices in exchange for a vast improvement in new crop sowing conditions.

In the short term our market will be driven predominately by weather or lack thereof, and should we see widespread rain appear on the forecast we could very well see the market capitulate. But if it stays dry, well then things are going are going to go in one direction. Watch this space.